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Purchasing Strategies - Questions & Success Stories
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A former Nissan dealer that I bought from more than 20 years ago tried to charge for everything and anything, including, as I recall, $10 for a tank of gas. Unfortunately, I was young and foolish and paid for most of what they asked. Fortunately, since then I have wised up and have never patronized them again, not for service or for sales.
So, they made money off me once. The dealer I do business with now has made money off me for 6 years of service with the Maxima, plus whatever they made off my recent purchase of a 350Z.
Bookish, if you bought your car a week or so ago, I doubt there's anything you can do now to get that money back. You could ask the sales manager exactly what it is, but I doubt they'll refund it. Just file that one under "lessons learned" and plan on looking elsewhere for service and future sales.
It is self evident that book stores are vastly different than car dealerships. First off is the fact that many people who actually read books do buy quite a few in any given year where car buyers buy cars every several years Not to mention the price difference. Secondly you can get just about any book in print from any bookstore, You cannot do that with a dealership. A dealership that only sells Lexus cannot get you a brand new Benz.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I've been negotiating with a dealership on a S60R. The dealer does not have an S60R on the lot but has located the one that I do want. So I've got the price that I was shooting for -- then I get an email from the salesperson I've been dealing with saying that the car will now be $3,000 dollars more for them to get it transported.
Sounds totaly bogus to me; they don't even pay that transport cost to get in from the factory in Europe.
Can anyone help me with this? Is this a bogus charge that I should dismiss? Or is there any validity at all to any charges for locating and obtaining a specific vehichle.
I'm not gonna pay it - it would be much cheaper for me to go get the car myself.
All thoughts and opinions would be greatly appreciated.
Not sure from where this car is being shipped, but it would have to come from quite a long ways to merit such a premium. (Perhaps you are being offered a special edition from Hong Kong or Zimbabwe?) But again, the dealer is free to try to sell the car for as much as he can get away with, it's up to you to decide whether you want to bother paying it.
Speaking of which, you really might want to consider European delivery. I'm not sure whether it really saves you much money on the purchase price per se (you might be able to negotiate it to a similar price here), but when you factor in the free flights, hotel rooms and the chance to break in your car on a European holiday, it might be a worthwhile way to make your purchase more fun.
There is validity to transport fees, but unless they are shipping next day air from Sweden...$3,000 is a rip off.
ryan....sounds like you've answered your own question. Depending how far away you'd have to travel, many here have done that very thing.
IF you know the dealership's name who has the Volvo you want, you might want to give them a call, too.
This is a regional advertising fee that Mazda charges on every new Mazda sold in your region. The fee amount varies per region. It is not a dealer charge but a fee on the invoice that the dealer pays Mazda as part of the price of the car.
I usually like to see all values for a used car, so when I was researching that, I noticed that the trade-in value for the particular make/model was $8,570 in "Good" condition. (I have to be uber-impressed to call something "Excellent"). The retail value is around 12.7K, with private sale around 10.5K, both in "Good" condition.
The asking price? $14,995!!! I know that I should disregard that, and I will. But I've done the Carfax & am pretty certain that this car is a trade-in. AT BEST, the trade-in value is $9,175 in "Excellent" condition & I believe it's safe to assume the dealership didn't pay a penny over that. That's a markup of $6000!!!
My question though, concerns the negotiation. Really, where should I start & where should I stop? My limit right now for ANY used vehicle is 12K. Should I apply that limit in this case or drop it a bit lower because of the fact that I know the dealership would still profit below that point?
I was picking up on the relationship thread and that's exactly why I gave the other examples. I am well aware of that dealerships are in a different boat and do not think we are disagreeing at all.
Bobst, when it comes to the small stuff that everyday life requires--groceries, haircuts, coffee, a math tutor --I have not found that my expectations are problematic. Because we own a business, if I express disappointment to a manager it is with the understanding that an employee's bad day, vendor delays, etc. are beyond their control.
I always want to know when my store's screwed up--late special order, ordered a hardcover when we wanted the paperback and so on. I know many businesses are monolithic and do not care. But small business folk do in my expereince.
I would start where the trade-in value is. The dealer will want you to start at asking price...don't fall for it.
Show salesperson Edmunds or KBB for trade-in value. Ask for their best offer over that. I'm thinking somewhere between $500 north of trade-in and private party should be doable. Do a "Search This Discussion" on "socala4" at top of page. He and others presented many good posts on negotiation strategy. You can use these methods and ideas during your negotiation to get the best price.
I would start out my negotiation somewhere close to wholesale KBB (perhaps somewhat below it), and move it up slightly from there. Use the negotiation techniques that some of us discussed above, as they are largely similar for buying new or used cars (and for that matter, furniture, stereo equipment and whatever else you'd care to haggle.)
I don't believe Edmunds prices include advertising.
We used to have constant problems with this at Infiniti. In the western region it was a flat $400 that Infiniti charged on the invoice to us on all new cars.
The problem was that neither this site or KBB showed it on the invoice prices on their sites so a lot of customers would throw a hissy fit when their $500 over invoice price was $900 over what they thought the invoice should be. Seeing as that $400 was totally non-negotiable, it stayed.
On more than one occasion I was accused of faking the invoice.
In the end the whole thing caused so much aggravation that Nissan scapped it as a seperate invoice item and just raised the invoice price of the car by 1.5 to 2.0%
Even when I worked for Priceline's now-defunct New Cars I had people accuse me of faking invoices...they only believed whatever the lowest number was that they could find.
In the end the whole thing caused so much aggravation that Nissan scapped it as a seperate invoice item and just raised the invoice price of the car by 1.5 to 2.0%
So simplifications can be done, should enough people complain. For me it's simple: all those bogus fees were introduced by both manufacturer's and dealers so the items can be advertized with lower "nominal" values and the the customer would give in "cause we are not going to grind for another little $300, are we?". It worked before the Internet, but now it usually backfires and leaves bad taste in the mouth.
I certainly hope the business will move towards much simpler pricing structure - not cenessarily fixed one, but just simpler, when $20K means $20K not "$20K plus plus plus, and plus". Perhaps not tomorrow, but there is a chance.
2018 430i Gran Coupe
This is why I pay little attention to the invoice price and negotiate purely on what the car will cost me as opposed to invoice plus or minus "X".
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
BTW, Edmunds does not include ad fees in their "invoice" price. They have a disclaimer for it.
2018 430i Gran Coupe
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Unless I'm reading the invoice wrong. There are two line items added on at the end below the price of the car and destination charges. Here they are:
LAM DEALER CONTRIBUTION 500.05 ADV 261 500.05
LAM GROUP CONTRIBUTION 500.05 EXP 65A 500.05
Did I read/assume wrong in that these are not adv. fees?
2018 430i Gran Coupe
Yes, this was on the invoice sent to me from the dealer.
One thing I notice, which is fishy for me, it looks like two fees charged to the same organization - one as a store, another as a chain (or something like that). One of them may be a nicely convoluted "contribution" to their headquarters, which is basically like paying themselves, but claiming to the customer it is an expense. I don't know - I just can't comprehend $1000 in ad fee for a high-volume vehicle.
I agree with Snake - those "invoice up" negotiations made sense before those fees became widespread - now they make them kind of meaningless. OTD approach may take you further, as "I don't car how much you claim you paid for it - I think it is worth XXXX and if you areee we have a deal, if you don't I go home".
2018 430i Gran Coupe
I would agree that it makes sense to go into these negotiations with eyes wide open, but invoice is still a good target around which to anchor your negotiations, because it helps with "bracketing" your price.
Here's a numeric example: Suppose that you want to buy a hypothetical car, a Toyota Tofutti GT:
-Based upon your research, you make an educated guess that you can buy for about $20,000 + tax + license + nominal doc fee.
-MSRP is $22,000
-Invoice is $20,000
As part of your haggle, it is much easier to get to something in the range of your target price of $20,000 if you direct the dealer toward the neighborhood of the invoice than if you start at a higher number in the area of MSRP. For example, if you get the dealer to make a first or second offer at $20,500, your initial offer of something below that ($19,500, for example) seems more reasonable than it would be if you were hovering in the $22,000 range as the MSRP would lead you to do. Here's an article that explains bracketing: "Bracketing Your Objective"
One caution about advertising fees: In some cases, they are similar to holdback, in that they get reimbursed post sale, so if you pay them, the dealer is collecting them twice. Here's a GM-related example, a snippet of an article from a 2003 edition of Automotive News which you will need to read between the lines:
General Motors will penalize major-market dealers who balk at joining local marketing groups.
Effective Jan. 1, dealers in most major markets who refuse to join local marketing groups will not get GM matching funds for ads for their individual dealerships. GM says the penalty is needed to make major-market advertising more effective.
Several dealers say the policy is aimed at holdout dealers who refuse to join the voluntary local groups. Those dealers, they say, benefit from the group advertising without paying the 1 percent advertising fee tacked onto member dealers' invoices.
Translated, this means that GM is paying additional money to dealers in order to advertise the cars, but only if those dealers join the advertising coop that slaps that advertising fee on the invoice. But add that ad fee onto the invoice, and the General will cut the dealership an additional check.
In that sense, the ad fee can be viewed as bogus, because the dealer ultimately gets other funds from the factory that will wash out that fee. By rolling the advertising fee into the invoice, the manufacturer wins because it makes sure that each dealer ponies up cash (sort of) to pay for advertising, and the dealer wins in two ways: (a) he can lure the customers into paying them, even though he will be collecting his fees post-sale from the manufacturer and (b) he can borrow against the cost of those fees, which effectively increases his return on equity.
The policies vary from manufacturer to manufacturer, but it can be fair to assume that the ad fee is similar to a holdback, in that it may be payable to the dealership after you've paid for the car. In the case of GM, I would definitely work to avoid paying it, as you can see from the article excerpt above that the ad fee is not something that the dealer pays without getting compensation after the fact.
-MSRP is $22,000
-Invoice is $20,000
This is where I disagree with you, I would research more information. MSRP and Invoice are meaningless for a fast selling hot car and it is also meaningless for a very slow moving car that stays on lots. If the car is flying off the lot ar $24,000 then thats the price. In other words its more in the area of what is the market demanding for that car.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
When I said OTD, I meant of course that you basically know how much OTD "should" be - to determine that you need to know more-less true dealer cost so you don't come up with something stupid.
This is nice - I wonder what will be next - separate invoice charges for badges, steering wheel and seats. How about that:
DREAMMOBILE Factory invoice:
1. Car price $0.99
2. Material surcharge: $8,780.20 (itemized positions provided upon request)
3. Factory direct labor fee: $11,522.50
4. UAW contract fee: $3,128.15
5. Management fee: $1,019
6. Factory maintenance fee: $525.11
7. Equipment renewal fee: $839.25
8. Set of badges: $111.25
9. Delivery: $525
10. I am already tired and out of ideas.
Dude - the car price is only 99 cents!
2018 430i Gran Coupe
The dealer will try to earn what he can, of course, but that price often approaches some number related to invoice. Because a dealer can make a minimal profit at a price somewhere in the range of invoice, less incentives, you can talk about numbers in this range that put you in a reasonable ballpark.
And I would agree that items such as ad "fees" or absurdly high doc "fees" should not be considered to be mandatory add-on amounts to the negotiated price, just because the dealer decides to call it a "fee". Just as I wouldn't pay a "coffee fee", "ballpoint pen fee" or "Armor All fee", I wouldn't assume that something called a "fee" equates to it being legitimate.
2. Material surcharge: $8,780.20 (itemized positions provided upon request)
3. Factory direct labor fee: $11,522.50
4. UAW contract fee: $3,128.15
5. Management fee: $1,019
6. Factory maintenance fee: $525.11
7. Equipment renewal fee: $839.25
8. Set of badges: $111.25
9. Delivery: $525
10. I am already tired and out of ideas.
That's classic. Sir, you have a bright future ahead of you in car sales!
I am not talking just high but also low. Some cars are going for way under invoice.
However, in most cases, the dealer is likely willing to content himself with a minimal margin in the neighborhood of invoice price.
Yes but by how far and in what direction? Some cars can go for well under invoice and some can go for well over invoice, even with different trims of the same car.
And I would agree that items such as ad "fees" or absurdly high doc "fees" should not be considered to be mandatory add-on amounts to the negotiated price, just because the dealer decides to call it a "fee".
And thats why it is wise to negotiate the entire cost of the car and not just the base price.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
sticker printing fee - $125.00
Sticker attachment fee - $75.00
sticker removal fee - $100.00
Air (for tires) -$25.00
Air insertion fee - $50.00
Browsing fee - $100.00
But to be serious every car company out there has an army of cost accountants breaking down the cost of the car into greater detail than you did.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I like to keep things seperate for the same reason that the dealer likes to keep things seperate: Because they are easier to insert or remove when they are kept seperate.
The dealer will attempt to haggle with you, getting you past your point-of-no-return to agree to a price, and then drop this fee on you under the guise that it is legitimate. (It's a "fee", after all...right?) He hopes that you have already worn yourself out to the point that you just accept these fees.
Going along those lines, I find this is a good table to turn back around onto the seller. Let him think that he will be able to slap on this fee at the last minute and let him haggle away, and then refuse to pay the "fee" when he gets around to throwing it back in toward the end of the deal.
If he knows from the onset that the "fee" will not be collected, chances are good that he will try to land you at a higher OTD sales price, because he will try to get the amount of this "fee" in some way, shape or form, so I allow him to hold onto that hope for as long as possible. Just as you might string the dealer along with the lure of your trade-in that you don't trade in, or with the promise of financing that you don't ultimately use, so you can do here.
I find generally idea of those fees as a typical example of "bait & switch" tactic, both on part of dealers and manufacturers. It gives them opportunity to put a claim of certain price target with all screams "YOU PAY", where the final cost to you is substantially higher. Even when you subtract all the charges assessed externally (i.e. government), it still adds up to much more than screamed in ads.
For me, this double talk is one of the reasons I do not hold their entire business in very high regard. The day they learn to speak in a straight fashion, with no fine prints and asterisks and no treating me like a last moron, they'll gain respect they claim they want and deserve. Anybody cares to guess when it may happen?
2018 430i Gran Coupe
That I completely agree with. No reason to let these "fee" blindside us buyers. Just because the dealer calls it a "fee" doesn't mean that we should pay for it. Aside from the amounts that are simply handed off to the government (license fees, sales taxes, etc.), everything is fair game and negotiable.
Thanks all.
Went and looked but didn't buy yet, I did a little more looking around and might go with a Harley. However my SIL is trying to get me onto a Honda (like that will ever happen).
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
A farmer had been ripped-off before by a local car dealer. One day, the car dealer told the farmer he was coming over to buy a cow. The farmer priced that cow with this invoice:
Cow Dealer Example
Basic Cow $499.95
Shipping and handling 35.75
Extra Stomach 79.25
Two tone exterior 142.10
Produce storage compartment 126.50
Heavy duty straw chopper 189.60
4 spigot/high output drain system 149.20
Automatic fly swatter 88.50
Genuine cowhide upholstery 179.90
Deluxe dual horns 59.25
Automatic fertilizer attachment 339.40
4 x 4 traction drive assembly 884.16
Pre-delivery wash and comb (Farmer Prep) 69.80
FARMERS SUGGESTED LIST PRICE $2843.36
Additional Farmer Markup and hay fees 300.00
TOTAL LIST PRICE (including options) 3143.36
For a cow that's worth maybe $2500.
Mooooooooo.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
True. But then again, I didn't see the farmer collecting either a holdback or any reimbursements from the "advertising fee" that was added to the invoice. Nor did he have a floorplan that effectively allowed him to borrow all of the amounts on the invoice, which would give the dealer a better ROE (return on equity) than the farmer.
The farmer seems OK in my book. At least he included the leather as standard equipment.
Says the man with too much time on his hands...
People love to try and compare car buying to normal retail buying (liking buying a gallon of milk). It's like comparing a paper airplane to an F-16 jet - one it simple and cheap, the other is extremely complicated and expensive.
So is it okay to call and ask about it to make sure the online details are correct? Maybe ask if they will get anymore 2006s in? I don't want them to tell me I have to go down there blah blah blah... I don't want to waste anyone's time. If I can't get an '06 with anti-lock brakes I'll have to wait for the '07 which I've seen a little preview of and don't particularly like as much.
Now they are offering me a car that has 180 miles on it but they will take off $180. Should I take it or demand for a lower mileage car?
Sounds suspicious to me.